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PeopleSoft swallows up configuration software vendor Calico

PeopleSoft will pay roughly $5 million to acquire the assets of bankrupt product configuration software maker Calico Commerce. One analyst hails the move and thinks it could give PeopleSoft an important leg up on Siebel.

Enterprise applications vendor PeopleSoft Inc. snapped up the intellectual assets of bankrupt product configuration software maker Calico Commerce Inc.

The Pleasanton, Calif.-based ERP and CRM specialist will pay roughly $5 million in cash under the deal.

Calico, San Jose, Calif., designed applications to aid configuration of complex products, specifically for online buyers. The company filed bankruptcy last year after unsuccessfully attempting to stay afloat by cutting staff.

According to Robb Eklund, vice president of CRM product marketing at PeopleSoft, the Calico technology will be rapidly brought to bear in both the company's CRM and supply chain management offerings. For its part, PeopleSoft already had product configuration functionality built into its supply chain management software.

"Calico offered an opportunity to significantly up the ante in terms of breadth of functionality, based on what we already had," he said. "In our effort to continue to build collaborative selling solutions this gives us a best of breed configuration for both CRM and supply chain products."

Eklund said the technology would be immediately integrated into specific sales and manufacturing aspects of PeopleSoft 8.4, due out in March.

According to at least one analyst, the move could prove a solid bargain to PeopleSoft going forward.

"They're paying nothing compared to what they'd have to spend to build the same capabilities in house," said Allen Bonde, president and lead analyst at the Allen Bonde Group, Boston. "The real story with this acquisition is that it helps PeopleSoft create a stronger story when it comes to helping people power the Web channel."

Bonde thinks the Web self-service space has the potential to be the next big thing in enterprise software.

"It's a space that intuitively the Siebels and PeopleSofts of the world should own, but they haven't, and that's because it's never been a core competence for them," Bonde said.

Bonde added that this acquisition might give PeopleSoft a leg up on Siebel in that regard.

Eklund said that PeopleSoft's customers are warming to technologies that continue to streamline internal operations.

"The demand for this kind of technology speaks to organizations thinking forward in terms of administrative applications in their businesses," Eklund said. "[Customers] are looking to put in place horizontal business processes that move between heretofore separate categories."

Eklund indicated an ideal use of the product configuration technology might be in a manufacturing business where custom proposals are received and then immediately flipped into sales orders for fulfillment.

The Calico acquisition is the second buyout that PeopleSoft has completed already this year, as the firm acquired marketing automation specialist Annuncio Software Inc. in January. The pattern may indicate that PeopleSoft has turned up its efforts to grow through MNA as it grabbed-up only two companies in all of 2001. PeopleSoft acquired enterprise service automation provider SkillsVillage in May, 2001, and catalog management applications vendor Cohera Inc. last July.

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